Success Via Margin Improvement Teams

I recently had the pleasure of interviewing Clif Colley, Corporate Director of Materials Management for Baptist Health Care (BHC) in Pensacola, Florida. Colley described the history, structure, process and results of BHC’s very effective and comprehensive Margin Improvement Teams. Colley and his colleagues have achieved significant margin improvements throughout many areas of their healthcare system thanks to their carefully structured and monitored margin improvement efforts.

BHC’s approach to margin improvement involves focusing on specific areas of the organization, identifying targets through the budget process and asking, “how can we improve margin in each of these specific areas?” Each Margin Improvement Team member is expected to suggest new specific ideas and opportunities. As effective cost-saving strategies are recognized, they are quickly applied; Colley emphasized a “take-action” approach, “It’s not only going to be identified, it’s going to be implemented!”

The Margin Improvement Teams are comprised of leaders who focus on specific areas. The teams include (1) Clinical Quality Value Analysis with responsibility for Perioperative, Patient Care Services, Cardiology, Imaging, Laboratory and Pharmacy; (2) Facility & Support Services Value Analysis with responsibility for Environment of Care, Information Services, Purchased Services & Professional Fees; (3) Labor and Benefits Analysis; (4) Supply Chain Value Analysis with responsibility for Logistics/Transportation/Distribution, Linen Services; (5) GPO/SESS Maximization; and (6) Revenue Cycle.

Team leaders choose team members who have appropriate expertise and can help drive value. For example, the Perioperative team chairperson is the CFO of a hospital in the BHC system. Her fifteen-member team is comprised of leaders from OR, SPD and Service Line, OR Buyers, a Financial Analyst and a Supply Chain Representative. The team meets every other week to identify projects and update the team on current projects and status. Colley states, “we are well on our way to achieving our goals for 2012.” 

Each team has an executive sponsor, and an Executive Steering Committee meets monthly to hear reports and progress as well as deal with barriers or obstacles that may be preventing a specific team from reaching its desired target. The Executive Steering Committee is led by the Vice President & Comptroller for BHC. The CEO and CFO also attend these meetings.

The bottom line of BHC’s focus on margin improvement is, “to improve profitability through an integrated approval process for new supplies or replacement of existing supplies with an emphasis on patient safety, patient outcomes and cost containment.” Colley states that the key is to “always keep patient safety first – to first focus on patient safety and doing the right thing for the patient – but then to balance the financial realities of patient care and healthcare providers.”

Colley, who has been with BHC for 18 years, currently chairs or participates in several margin improvement teams, and has helped drive millions in savings to the organization, and to the physician preference areas in particular.

Even with the success and results-oriented focus of their margin improvement teams, Colley and his team continue their clear focus on BHC’s top priorities; “The number one focus is… patient safety and quality of care.” The leadership of BHC stands firmly behind the philosophy that “improving margin by sacrificing quality is absolutely unacceptable.”

Colley will be presenting at the upcoming Healthcare Supplier/Provider Institute (HSI) meeting in Las Vegas, Nevada, on April 9 & 10, 2012. Colley will be available to answer questions regarding the history, structure, process and results of the Baptist Health Care Margin Improvement Teams. For more information about the HSI meeting, please visit the following website: http://www.jhconline.com/healthcare-supplierprovider-institute-meeting-2012.html.

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I am a leader, speaker, and author who is passionate about Leadership Excellence and Achieiving Greater Success. I am the author of the books Be An Inspirational Leader(2016) and Presidential Leadership (2013), and deliver keynote presentations on those topics and several others.

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